How to Use Your FSA or HSA on Over-the-Counter Medications

By Charlene Hope, PharmD, MS  |  Mindful Medicine

You may be sitting on hundreds — or even thousands — of dollars in tax-free health savings without fully using them. If you have a Flexible Spending Account (FSA) or Health Savings Account (HSA), you can use that money on many over-the-counter medications, no prescription required. But most people don’t know exactly what qualifies, and that money quietly expires or sits untouched.

What Are FSA and HSA Accounts?

Both FSAs and HSAs let you set aside pre-tax dollars to pay for eligible healthcare expenses. The key difference: an FSA is typically employer-sponsored and has a use-it-or-lose-it deadline (usually December 31), while an HSA is paired with a high-deductible health plan and rolls over year after year. Either way, every dollar you spend from these accounts goes further because it was never taxed in the first place.

A Game-Changer for OTC Shoppers

Before 2020, using your FSA or HSA on OTC medications required a doctor’s prescription — which was both inconvenient and counterproductive. The CARES Act changed that permanently. Since January 1, 2020, you no longer need a prescription to purchase over-the-counter drugs and medicines with FSA or HSA funds. This opened up a wide range of products that most households buy regularly anyway.

What OTC Medications Are Eligible?

As a pharmacist, I get this question constantly. The general rule is: if a product is used to treat, prevent, or diagnose a medical condition, it’s likely eligible. Here’s a snapshot of what typically qualifies:

•  Pain relievers and fever reducers (ibuprofen, acetaminophen, aspirin)

•  Cold, flu, and cough medications

•  Allergy medications (antihistamines, nasal sprays)

•  Antacids and heartburn relief

•  Sleep aids and anti-anxiety (for documented sleep disorders or anxiety)

•  First-aid supplies (bandages, antiseptic)

•  Menstrual care products (added under the CARES Act)

What’s generally NOT eligible: vitamins and supplements (unless prescribed for a specific diagnosis), personal care items like toothpaste and shampoo, cosmetics, and foods — even “healthy” ones. When in doubt, check your plan’s eligible expense list or ask your pharmacist.

How to Pay Using Your FSA or HSA

Most FSA and HSA accounts come with a debit card. Just swipe it at the pharmacy counter or checkout like any other card. Many retailers — including major pharmacy chains and large discount stores — have systems that automatically filter your eligible items at checkout. If you’re shopping online, look for retailers that offer FSA/HSA-specific shopping filters to make it even easier. Always save your receipts. Your plan administrator may ask for documentation, especially for items that could be used for non-medical purposes.

Don’t Let Your FSA Money Expire

FSA funds typically expire at year-end, though some plans offer a grace period through March 15 of the following year or let you roll over up to a limited amount. If you’re approaching that deadline, stocking up on OTC medications you regularly use — pain relievers, allergy meds, antacids — is a smart, completely legitimate way to use your funds before they disappear. Think of it as advance shopping for things you were going to buy anyway, paid with tax-free dollars.